"In a letter sent to Yahoo on Thursday, the investment firm Starboard Value argued that the reason for spinning off the Alibaba stake — avoiding taxes while raising money for shareholders — appeared to have evaporated after questions arose over whether the Internal Revenue Service would crack down on such transactions.

Instead, Starboard argued, the company should explore selling its core advertising business, leaving behind only its stakes in both Alibaba and Yahoo Japan. Although such a move would incur taxes, it would be swifter and more certain than pursuing an Alibaba spinoff that could lead to years of fighting with the I.R.S."